Visa, MasterCard See Gold in Prepaid

Global prepaid card spending will be nearly $680 billion by 2015, Laura Kelly, head of MasterCard's Global Prepaid Product Development and Management, said during the company's investor day last month. Kelly cited a figure from the Boston Consulting Group.

"In the mature markets, U.S. for example, [prepaid] is growing at double-digit rates. In the emerging markets it's growing at triple digits," she says.

Battle for Market Share

While MasterCard remains far behind Visa in the debit card space -- something it is vigorously trying to change -- it's unclear which payment network has the leg up on the prepaid market. But David Robertson, publisher of The Nilson Report, a newsletter for the payments industry, says Visa has generally a larger share of the government sector, while MasterCard is bigger in gift cards.

But both companies are working toward grabbing a larger market share.

More than 30 states in total are using or in the process of implementing Visa prepaid cards, the company says. Last week, Visa won a contract with the state of Michigan to disburse unemployment funds through its prepaid cards.

Last year, Visa created the Wal-Mart Money Card, a reloadable prepaid Visa card for the unbanked who use Wal-Mart (WMT Quote) for basic money services. The card is issued by GE Money, a unit of General Electric(GE Quote).

MasterCard won a contract with the Treasury Department and Comerica (CMA Quote) as the card issuer to offer prepaid debit cards to the unbanked for Social Security payments. The contract, announced in January, will offer receivers faster access to their Social Security, without the need for high check-cashing fees.